The DKI Provincial Government Asks The Ministry Of Finance To Remove Electric Vehicle Tax Incentives, Unfortunately It Will Not Be Revealed

Deputy Coordinator of Special Staff for the Governor of DKI Jakarta Yustinus Prastowo admitted that the DKI Provincial Government has proposed that the Ministry of Finance abolish the 0 percent electric vehicle tax incentive.

This proposal was submitted by the DKI Provincial Government due to the high potential income from the motor vehicle tax sector (PKB) and the transfer fee for motorized vehicles (BBNKB) lost from the electricity vehicle tax exemption. Based on the calculation of the DKI Provincial Government, the potential for lost regional income reached Rp2 trillion.

However, after being submitted, the Ministry of Finance has not granted the 0 percent proposed revocation of PKB for electric vehicles. The reason is because the lsictric vehicle incentive has been mandated in the law.

"We have gone to the Director General of Fiscal Balance, reported, discussed. Because this is a mandate of law. Law 1 (year) 2022. So if (incentives) are changed, it must change the law. Now, it seems a bit difficult," said Prastowo at DKI Jakarta City Hall, Friday, November 21.

Therefore, the DKI Provincial Government is looking for other policy alternatives that can be proposed to the Ministry of Finance. One of them is by asking the central government to increase the nominal transfer funds to the regions in the APBD the following year.

"The problem with the vehicle tax is that we lack funds, then to overcome the impact of traffic jams, the impact of pollution and so on. So if we get support from the center in the form of transfer funds, for example, we can compensate for the lost taxes," said Prastowo.

However, the DKI Provincial Government has not determined the value of funding from the central government to be proposed to replace the loss of revenue from the electricity vehicle incentive.

This is because the fiscal burden of the electric vehicle incentive policy is not only felt by Jakarta, but also other areas. Therefore, the DKI Provincial Government handed over the decision to increase transfer funds based on the calculation of the central government.

"We don't, we don't convey the value, we just convey the information. We leave it to the central wisdom. But don't be slow, other areas will be affected. Big cities. I think this must be anticipated. Moreover, the fiscal capacity is narrow, it can be directly affected. Because the vehicle tax includes the backbone of revenue in all regions," he explained.

Previously, the Head of the DKI Jakarta Regional Revenue Agency (Bapenda) Lusiana Herawati admitted that the central government's policy of incentives for electric vehicle taxes had a significant impact on reducing regional income.

Currently, the Motor Vehicle Transfer Fee (BBNKB) and Motor Vehicle Tax (PKB) for electric vehicles are still set at 0 percent until the end of 2025.

According to him, the potential for regional income from the two electric vehicle tax sectors should be quite large. However, the implementation of 0 percent incentives has made DKI tax revenues significantly decreased.

Actually, from the PKB and BBNKB taxes, it is extraordinary that our income should be. (From the incentive of 0 percent of electric vehicle tax), our revenue (regional) decreases by around Rp. 3 trillion," he said.

Therefore, the DKI Provincial Government is coordinating with the Ministry of Finance to review the policy. He considered that the recent surge in sales of electric vehicles should be a consideration so that tax incentives are not allowed to drag on.

"If it can be reviewed, it is related to the central policy for PKB taxes and electric vehicle BBNKB. Because until now sales of electric vehicles have soared, very high. So if this is allowed, then regional income, not only DKI, the regions will be eroded from there," said Lusi.